The bribery scandal at CalPERS likely cost the pension fund tens of millions of dollars in inflated fees, a lawyer hired by CalPERS to investigate the case said Monday. [Readers should remember we, the taxpayers are on the hook for the lost dollars which are part of the promise politicians made to CalPERS members with our money, for their benefits. That’s the rub!]

Washington lawyer Philip Khinda, in a report to the California Public Employees’ Retirement System board, said former “placement agent” Alfred Villalobos corrupted top pension fund officials, notably former Chief Executive Fred Buenrostro, to steer investments to his clients.Click here to read more.”

John Seiler at Cal Watch Dog asks: How much more of this are Californians going to take? Will another tax increase be needed?

L.A. Times Reports:

In a scathing report, a former chief executive of the California public employee pension fund was accused of pressuring subordinates to invest billions of dollars of pension money with politically connected firms.

A 17-month investigation also found that Federico Buenrostro Jr. — along with former pension fund board members Charles Valdes and Kurato Shimada — strong-armed a benefits firm to pay more than $4 million in fees to consultant Alfred J.R. Villalobos, who later hired Buenrostro.

The report, prepared for the California Public Employees’ Retirement System by Washington law firm Steptoe & Johnson, comes amid widening attacks on public employee pension funds in California, Wisconsin, Iowa and other states for providing lavish benefits that cash-strapped governments can no longer afford.

As he notes in his post, it’s long but well worth the time if you handle the darkness of truth told. I suggest you read the comments at the end of the post on CalWatchDog’s blog. I hope someone posts a reply to the public employee retiree who gives the pat excuse and rational that it’s not their fault and it’s only fair given what someone of their same education background gets in the private sector. First, that’s a myth, second, if it were true, public servants were supposedly sacrificing the “higher” pay and benefits of the private sector to serve and in return would be assured a modest but secure pension. Ha! We have been had! A link to CalWatchDog.com is at the bottom of the video. Click here to read the comments on CalWatchDog’s Blog.

In 1999 then California Governor Gray Davis signed into law a bill that represented the largest issuance of non-voter-approved debt in the state’s history. The bill SB 400 granted billions of dollars in retroactive pension boosts to state employees, allowing retirements as young as age 50 with lifetime pensions of up to 90% of final year salaries. The California Public Employees’ Retirement System sold the pension boost to the state legislature by promising that “no increase over current employer contributions is needed for these benefit improvements” and that Calpers would “remain fully funded.” They also claimed that enhanced pensions would not cost taxpayers “a dime” because investment bets would cover the expense.

What Calpers failed to disclose, however, was that (1) the state budget was on the hook for shortfalls should actual investment returns fall short of assumed investment returns, (2) those assumed investment returns implicitly projected the Dow Jones would reach roughly 25,000 by 2009 and 28,000,000 by 2099, unrealistic to say the least (3) shortfalls could turn out to be hundreds of billions of dollars, (4) Calpers’s own employees would benefit from the pension increases and (5) members of Calpers’s board had received contributions from the public employee unions who would benefit from the legislation. Had such a flagrant case of non-disclosure occurred in the private sector, even a sleepy SEC and US Attorney would have noticed.

Eleven years later, things haven’t turned out as Calpers promised. While state employees have been big winners from the bet, the state budget has been, and will continue to be, a huge loser. Far from being “fully funded” as promised, Calpers has already required $15 billion more from the state budget than projected in 1999 and $3.5 billion is budgeted for this year, a figure that is more than five times the expense projected by the state legislature in its SB 400 analysis. Pensions are crowding out important programs like higher education, parks and health care, and the state will continue to whack away at those programs because the legislature refuses Governor Schwarzenegger’s request to repeal SB 400 for new employees.

The state’s pension funds are still trying to dupe taxpayers. In response to a recent Stanford University study that concluded California’s pension funds are understating liabilities by $400 billion, California’s pension funds set up “spin” websites and attacked the study as “shoddy” and “faulty.”Click here to read the full article.

New York Congressional Race District 23 is a revolt of Republican registered voters against their own party. They want limited government and are demonstrating to their party officials and leaders, they mean business. Scott Wheeler, Executive Director of the National Republican Trust drops in for a quick update on the battle that illustrates for Republican Party bosses what their voters want and what constitutes a deal breaker.

As the Fight Over Global Warming Heats Up, so does growing skepticism and concern over flaws in the climate change models and so does the frenzy of the proponents for cap-and-trade legislation in the Senate, to ram policy through without delay. Is it really a crisis? If so, what’s the crisis?

Marcia Fritz, President of Californians for Pension Reform, joins us to discuss the unbelievable, corrupt, costly abuse of public trust and the public’s legal obligation to cover the losses. We’ll look at how Calpers directors have played fast and loose, taken extreme and hazardous risks on investments, and incurred massive losses, down $56.2 billion in one year, 23% of the value, with funds guaranteed by taxpayers.

The lines are open. I hope you put us on your calendar, tune in, give us a call, and join us for hot talk radio, Saturday at 10AM PT, one fast hour on CRN 1CRN Digital Talk Radio is now available in High Definition audio! Listen to CRN on your local cable or satellite provider, local radio affiliate, mobile device or at CRN! To see where CRN is available in your area click here.To request CRN Digital Talk Radio in your home or for advertising information, email info@CRNi.net.

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The status quo of education in the U.S. is destructive to our Nation, and to ignore this truth is to be numb, unconscious or in denial of reality.

"If an unfriendly foreign power had attempted to impose on America the mediocre educational performance that exists today, we might well have viewed it as an act of war. As it stands, we have allowed this to happen to ourselves. We have even squandered the gains in student achievement made in the wake of the Sputnik challenge. Moreover, we have dismantled essential support systems which helped make those gains possible. We have, in effect, been committing an act of unthinking, unilateral educational disarmament."--A Nation At Risk - April 1983

Drug War Clock for Current Year

Police arrested an estimated 858,408 persons for cannabis violations in 2009. Of those charged with cannabis violations, approximately 89 percent were charged with possession only.
Source: Uniform Crime Reports, Federal Bureau of Investigation Your tax dollars at work--but for whom?

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The Gadfly

Dedicated to considerations of justice and the pursuit of goodness… "to sting people and whip them into a fury, all in the service of truth." --Plato on Socrates